Category Archives: Best Rates

Dovish Reserve Bank of Australia Sinks AUD Rates Leaving Investors Unsettled

The outlook for the AUD was looking to the Reserve Bank of Australia (RBA) meeting which occurred yesterday. The current trend of the AUD looked as if the RBA would take a ‘dovish’ approach to their monetary policies. Investors had hoped that this would not be the case as the currency would lose momentum. As the minutes were released from the meeting yesterday this seemed to be exactly the case.

Sharp Retreat For Australian Dollar

The Reserve Bank of Australia’s minutes were released yesterday, which caused a sharp retreat of the AUD in the market. The meeting, which covered monetary policy, showed a bank that was still poised to cut interest rates despite current record lows. The key official cash rate was left at 0.75% but the minutes revealed that the possibility of another cut could not be ruled out.

Likelihood of a Further Interest Rate Grows

With the findings of the minutes from the RBA, it is more likely than ever that interest rates will be cut to a new record low before long. Policymakers in the meeting saw a clear case for the fourth rate cut of 2019, but have decided to wait and observe the effects of previous rate cuts before moving forward. The bank highlighted that only gradual progress has been made so far which gave reasoning to potential future cuts. The minutes also revealed that whilst members has judged that lower interest rates were supporting the economy, they also noted the possible negative impacts of lower interest rates on savers and for confidence in the AUD.

GBPAUD Interbank Exchange Rate Slumps Amidst RBA’s ‘Dovish Tilt’

Reports have suggested that the pound to Australian dollar exchange rate had slumped following the news of a ‘dovish’ RBA. The Aussie dollar edge up against the pound despite the proposed considerations of another rate cut. The trading rate was around AU$1.8953 yesterday. The GBP will be hoping for a boost following the YouGov poll, released after last night’s live head-to-head debate between Boris Johnson and Jeremy Corbyn. The pound continues to edge higher on hopes that a Tory majority will be achieved in December’s elections.

In regard to today’s outlook, the AUD could surrender some of yesterdays gains following the release of Westpac’s Leading Index. Should the index slump it could weigh on the AUD. Meanwhile for the GBP, if the polls suggest further support for the Conservatives it will likely give a further boost to the pound sterling.

If you are in the process of buying or selling Australian dollars and would like a free quote then contact me directly, Tom Holian, I look forward to hearing from you. teh@currencies.co.uk

GBPAUD Outlook Rates Break 1.90

To start the week the GBPAUD interbank exchange rate has rallied higher, with rates bursting through the 1.90 range for the pairing. The pound looks like it has started the week off on the front foot, making gains against all major currencies. This is despite the impending general election, which could be set to stir up some uncertainty. Meanwhile, Aussie employment data disappointed and sent the currency on a further downward spiral.

UK GBP Data Disappoints But Doesn’t Inflict Damage on the Driving Force

The UK’s Gross Domestic Product (GDP) data was recently released, the figures were lower than expected at 0.3% (with an expectation of 0.4%). The ongoing Brexit uncertainty has had a minute effect on the GBP exchange rates over the past few years. However, the weak data did not alter the course of the Pound Sterling to Australian Dollar exchange rate as the prospect of a Torie majority is currently the main driving force for the GBP. The current polls have placed Boris Johnson with a slight majority but volatility is expected and the outcome of the elections could swing either way.

Australian Employment Data Returns Poor Values, Adding Salt into the Wounds

An already struggling Australian dollar was hit with more bad news to start the week. The unemployment figures came back at 5.3%, rising from 5.2% previously. This negatively impacted the Australian economic outlook and disappointed the markets. The Reserve Bank of Australia (RBA) have previously cut interest rates three time this year and do not plan to make any more until at least 2020. Attention is turning to today’s (Tuesday) Reserve Bank of Australia (RBA) minutes which will likely offer some insight into the banks standpoint on future monetary policies.

AUD Waits for US-China Breakthrough for a Boost of Optimism, Whilst GBP Clings to Tory Majority

The struggling AUD is facing a slump as its traders await positive news from the US-China talks. The US appears firm on its mention of only agreeing to a deal that is positive for the US. This is likely to be what has caused a recent slow on the trade deal progress. Little information has broken from either camp and so investors are left twiddling their thumbs. Meanwhile, those investing in GBP will be hoping that recent news that a Tory majority is likely to be the outcome of December’s election, in a bid to keep the optimism behind the GBP rolling. The findings from the RBA’s minutes in today’s meeting will be telling of the future for the AUD and its monetary policy. There is a chance that they may take a ‘dovish’ turn to try to recover the falling currency.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

Australian Dollar Rate Remains Flat After Unimpressive Performance from UK Figures

Yesterday (Tuesday 12th) saw the release of the UK’s latest labour figures. Both the UK and interacting currencies were hoping for positive results in an attempt to give them a much-needed boost in the market. However, as the figures were released today some have described them as ‘unimpressive’.

GBP Slumps as Figures Underwhelm

Many were hoping that yesterday’s labour figures from the Office for National Statistics (ONS) were going to be promising. The unemployment rate provided a good response with a fall from 3.9% to 3.8% in September. This matches the 44-year low observed earlier in the year and beat expectations that predicted the figure to remain steady. Wage growth figures on the other hand were not as impressive, with average earnings declining from 3.7% to 3.6%.

The results were not terrible by a long shot, but it did resemble the slowest pace of wage growth in the past 4 months and given a recent fall in vacancies, it may be a sign that the UK’s labour market is slightly degrading. As a result, feelings toward the GBP were pessimistic and this showed in the GBP rate taking a slight hit.

AUD Still Clings on to Hope of a Trade War Deal

The AUD continues to keep a close eye on the events surrounding the US-China trade talks. With remarks coming from Donald Trump a few days earlier denying agreeing to tariff rollbacks, the advancements in the deal were showing signs of slowing. The market will have kept tabs on the president at last night’s appearance at the New York Economic Club. Given his unpredictability, investors in the AUD will be looking to see what unfolds.

Economists Predict Pressure on the GBPAUD Exchange Rate in Upcoming Days

As we roll into the second half of the week, attention turns to the upcoming consumer price index (CPI) data from the UK. Analysts have revealed that it is likely that the CPI figures will highlight a slowing in the UK inflation from 1.7% to 1.6%, its lowest level since December 2016. This is likely to increase the chance of the Bank of England cutting interest rates in 2020.

Equally, AUD investors will be anticipating results from Australia’s quarterly wage price index which was released overnight. Should the wage growth slow it is likely to put pressure on the AUD and increase the chances of the Reserve Bank of Australia cutting their interest rates also.

If you are in the process of buying or selling Australian dollars and would like a free quote then contact me directly, Tom Holian, I look forward to hearing from you. teh@currencies.co.uk

How the RBA rate decisions are likely to affect the AUD/GBP rate

The Reserve Bank of Australia (RBA) has been in talks in the last 24 hours to discuss the future of its rate cutting. Analysts are predicting that the RBA will refrain from any further cuts at least till the end of 2019. This may be a positive move as analysts suggest the market isn’t ready for another cut whilst others suggest that the RBA may have its hand forced into cutting rates later in the year or at the start of 2020.

Cause of previous rate cuts

The RBA has previously cut rates three times this year. This was to lift growth and inflation. Many experts predict that it will not be long before the RBA cuts the cash rate once more to a new record low of around 0.5%. The bank will most likely look toward achieving ‘full employment’ which should see rising wage packets, eventually leading to higher inflation. This puts an emphasis on the monthly job numbers in the coming months ahead.

The RBA’s outlook on rate cutting

The predicted outcome for the RBA is that it will likely be forced to cut its cash rate once more in the first half of 2020. In doing so, the Australian dollar will likely hit new lows, going toe-to-toe with the US dollar over the next six months. However, analysts have stated that another cut so soon could spell detriment to the AUD as the financial markets are not prepared for one so soon. Another cut so soon could negatively affect the AUD/GBP pairing, so this may be one of the reasons behind the RBA holding back on performing another cut right now.

Current state of AUD trading following the RBA meetings

On Tuesday, reports suggested that the AUD/USD and AUD/JPY interbank exchange rates were both down from their session highs, meaning the AUD is on the backfoot with these RBA meetings inbound. Analysts have also suggested that the AUD is looking likely to be volatile and show signs of exhaustion at higher levels as the US and China continue their back and forth about their trade deals.

On the other hand, should the US-China deal go well is likely that the AUD will continue to rise and fare well against sterling. Potential buying GBP with AUD may seek the news of the US-China trades before making any significant purchases as this may create opportunities should the deal come off positively.

For more pound and AUD news, keep up to date with our daily blogs. Alternatively, if you have a currency requirement you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.

The 3 biggest political factors affecting the AUD to GBP forecast

It is no secret that politics affects the currency rates across the world. The outcomes of particular political events can shift the going rate of both the home countries currency as well as others that interact with it on the global market.

One of the more well-known pairings is the AUD to GBP rate. Recent political factors have caused shifts in the trading rate.

Brexit

No matter which country you are reading this from, it is very likely that you will be aware of the Brexit proceedings which are ongoing in the United Kingdom. The twists and turns along the way in the UK’s departure from Europe has caused a stir amongst many currencies and the Australian Dollar is no different.

In recent news, the upcoming general election has analysts warning that the outcome will be difficult to predict. This is due to voter volatility, a possible revival of the anti-Brexit Liberal Democrats as well as the unpredictable effects which will arise from the UK’s first past-the-post electoral system which will likely be a complicated matter. Labour leader, Jeremy Corbyn has brandished the Tories Brexit plan as ‘Thatcherism on steroids’.

Attention is firmly focused on the unfolding events of Brexit. The outcome of the general election in December is likely to cause a shift in the currency rates across the world. There are several outcomes which may arise. A conservative majority, an opposition party majority such as Labour, or even Brexit being taken off the table completely.

Trade wars

Ongoing trade wars have been forcing the banks of several countries to cut their interest rates in a bid to stay in the global trade race. Talks between the US and China have been observed and they appear to be going well. Analysts have proposed that Australia and China share a close link in economies, and should China benefit in the trade talks it is likely to boost the AUD also.

Meetings between central banks

Closer to home for the AUD, meetings are taking place this week with members of the Reserve Bank of Australia (RBA). The RBA decided not to cut interest rates in trend with other countries like the US recently as they observed a lower jobless rate, which was the first time since February alongside 26,200 full-time jobs being added last month. The meetings are likely to discuss the viability of future interest rate cuts should they be necessary. Should this action be taken, the AUD is likely to be affected, depending on the decision of the RBA.

You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can if you would like to learn more.

Refreshed Brexit negotiations and economic uncertainty in China

The UK is facing some potentially history-shaping events at present. Uncertainty is rising and unrest is creeping in amongst politicians and the public alike which is reflected in the ups and downs of the pound’s strength against the Australian dollar.

So what’s impacting the GBP/AUD interbank exchange rates?

The uncertainty of Britain’s future within the European Union has played a huge part in the pound’s strength against the Australian dollar for well over 3 years now, but recent events have caused even greater fluctuations than what can usually be expected.

The pound was up again after Prime Minister Boris Johnson announced that Europe had accepted his Brexit deal. But now after asking for an extension past the October 31st deadline, we are seeing more sheepish approaches to backing Sterling once more – despite holding on to the majority of its recent gains.

Increased general election talks

Much in the same vein as Brexit, general election talks being spurred on by Jeremy Corbyn are creating more instability in the house of commons – something which has seen the AUD strengthen against the pound.

The more likely a no deal Brexit and general election become, the stronger the AUD becomes against the pound, so this is certainly something you’ll want to be monitoring over the coming months.

China’s economic uncertainty

Since the Australian dollar relies so heavily upon exports to China, it is at the mercy of any uncertainty of its economy.

With the US and China locked firmly in a trade war, the Asian’s economic climate has suffered greatly, having an unfortunate knock on effect on the strength of the AUD against the Pound.

This can all be reversed if the trade war is brought to an end, but with that not looking likely to happen any time soon, the AUD is likely to continue to suffer.

Keep an eye on relations between the US and China, especially if you have a vested interest in the Australian Dollar.

For more pound and AUD news, keep up to date with our daily blogs here, alternatively you can sign up with us here.

GBP/AUD drops from its annual highs as Brexit momentum slows

The Pound has eased off from the highs we saw earlier this month as the next steps for Brexit have become less clear.

Sterling has risen dramatically this month as UK Prime Minister Boris Johnson has agreed a new deal with the EU that so far has been received well, although his hopes of pushing the deal through before the end of the month as he had hoped are fading.

When will the UK have a general election?

Parliament has voted in favour of agreeing a new timeline for the UK’s departure rather than rushing to implement the deal, and now we’re awaiting an update from the EU as to whether or not they will agree another Brexit extension and also for how long. The general consensus is for an extension up until the 31st of January and the chances of a general election have also increased now which is something Boris Johnson is pushing for, whereas Labour leader Jeremy Corbyn has been less willing to agree to.

At the time of writing the GBP/AUD pair are trading in the 1.88’s and the highest point of the year came earlier this month when they hit 1.9093. The gains for the Pound due to the decreased chances of a no-deal along with the new Brexit Withdrawal Bill have been aided by the falling Aussie Dollar, with the Reserve Bank of Australia opting to cut Australian interest rates to their lowest levels in history.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Is QE on the cards from the Reserve Bank of Australia? (Daniel Johnson)

Pound to Australian Dollar Forecast

The Australian economy has suffered of late with a drop in house prices, increased unemployment and a cut in interest rates to a record low of 1%. Australia is heavily reliant on China purchasing its goods and due to this the US/China trade war is having an impact on the Australian Dollar.

China is in the midst of its slowest economic expansion in thirty years and the Chinese Yuan continues to drop in value posting a fresh 11 year low on Monday. Dr Adam Triggs of the Australian National University’s Asian Bureau of Economic Research points to the Trade War as a huge contributor to the Australian economy’s recent stalling “We trade a lot more than most countries and we rely on foreign money for investment, so when you start to get international turbulence we feel that a lot more than others.”

The  concerns around the Chinese economy and its drop in demand for Australian goods and services has meant that the Pound has managed to regain a footing above 1.80 on interbank despite the Brexit chaos Boris Johnson has been inflicting since taking over as Prime Minister.

As Australians interest rates follow the global trend of cuts there has been much speculation over the Reserve Bank of Australia’s, (RBA) next step in efforts to stimulate economy. For some time Westpac has led calls for the Reserve Bank to consider a further cut to 0.5% while Deutsche Bank says it expects the cash rate to drop to just 0.25% by as early as the end of this year. However, Philip Lowe the governor of the RBA has ignited a debate over whether Quantitative Easing (QE) would be the next step for the RBA. QE is essentially pumping money into an economy in order to stimulate growth. It is a controversial monetary policy as historically results have been mixed, it is far from a proven method and can also put the country in question in huge levels of debt. In the face of an economic crisis when he commented “we are prepared to do unconventional things if the economy warranted it” when questioned in Parliament.

During unpredictable times you may wish to be in contact with a currency specialist who can provide the latest currency updates. Foreign Currency Direct PLC has specialised in foreign exchange for over 19yrs and we are authorised as an e-money institution by the FCA. If you already use a provider, I can perform a comparison within minutes, to give you an indication of the potential saving you could make by using Foreign Currency Direct. If you would like my assistance I can be contacted at dcj@currencies.co.uk.

 

Could we see Monetary Stimulus from the RBA? (Daniel Johnson)

Pound to Australian Dollar Forecast

This year the Reserve Bank of Australia (RBA) has continued to cut interest rates leaving the base rate at a record low of 1%. The change in monetary policy has so far failed to stimulate growth in the Australian economy which has resulted in the RBA board looking at  alternative methods of stimulus to try and aid the struggling economy.

There is the potential that quantitative easing (QE). QE is essentially pumping money into an economy in order to stimulate growth, printing money causing huge levels of debt.  The minutes of the RBA’s July meeting revealed that these unconventional monetary policy measures were discussed.

Both the Pound and the Australian Dollar are under pressure at the moment, although for different reasons as the Australian Dollars are mostly due to economic uncertainty as opposed to the UK’s ongoing political issues.

Over the past year the GBP/AUD rate is almost flat although in recent months the Aussie Dollar has mostly benefited from Sterling weakness which has kept GBPAUD below 1.80 for almost 2-months now.

The time scale for a deal on Brexit does not make good reading. Parliament is not due to reconvene from recess until early September which will leave just under eight weeks for Boris Johnson to get a deal in place. This is something Theresa May couldn’t do in over two and a half years.

Boris has threatened to leave the EU with no deal in place and has said he is not willing to negotiate with Brussels unless they’re willing to drop the Irish back stop. This is something Brussels have stated on numerous occasions they are not willing to do. The situation has not been taken well by investors and sterling has fallen in value as a result.

There is also the possibility of a general election and it will be interesting to see how the market will react. If we look at the 2010 general election for example, we saw sterling lose value due to the political uncertainty, but if Corbyn were to call for an election the probability of a no deal decreases which could cause a rally for the Pound.

The higher probability of a no deal the weaker you  could expect the pound to become.

Despite the problems surrounding the Australian economy unfortunately it seems that the problems surrounding Brexit outweigh those down under. Until there is some sort of clarity surrounding the Brexit debacle, there could be little reason to justify significant gains for the pound.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 19yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

 

Pound to Austrlian dollar predictions: Major volatility expected for pound to Australian dollar exchange rates

Of late mixed outlooks for the Australian dollar has caused the pound to remain range bound against sterling, with GBPAUD fluctuating close to 1.80. The Reserve Bank of Australia recently cut interest rates and forecasters second guessed that another cut is on the horizon as the RBA would need to follow the trend of its nearest neighbour as the Reserve Bank of New Zealand cut rates by 0.5% as their last meeting. In addition the RBA has even hinted at more unconventional methods such as quantitative easing and history would tell us that this could have a detrimental impact on the value of the Australian dollar.

However in recent RBA minutes, the RBA have stated that house prices in Sydney and Melbourne have actually been on the rise in recent months which is positive news for Australia as the housing market is a key cog to Australian economy. Therefore further cuts in interest rates should help the housing market however the RBA will have to think again if house prices continue to rise.

In less than two weeks MPs in the UK will return to the House of Commons and all eyes will turn to the leader of the opposition. Jeremy Corbyn has stated that he will file a motion of confidence against Boris Johnson and it will be interesting to see if any Tory rebels will back Corbyn in a bid to stop a no deal Brexit. Forecasters are suggesting that a no deal Brexit will cause the pound to crash, therefore if Boris is ousted this could help the pound, however if Boris takes the UK out of the EU without a deal this should help clients that are selling Australian dollars to buy pounds.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.